Hero MotoCorp MD Pawan Munjal's close aide illegally exported foreign currency worth Rs 40 cr: ED

The Enforcement Directorate (ED) on Wednesday said that one of the key associates of Hero MotoCorp MD Pawan Kumar Munjal illegally exported Rs 40 crore worth of foreign currency for meeting the expenses of Munjal during his personal or business foreign trips. This comes a day after the agency raided 12 locations in Delhi and Gurugram in a case of money laundering involving Munjal, Hero Fincorp Limited, and employees of Salt Experience and Management Pvt Ltd (SEMPL). The ED initiated the probe under the PMLA (Prevention of Money Laundering Act) based on a prosecution complaint filed by the Directorate of Revenue Intelligence (DRI).

The DRI had filed a case against Munjal, and some of his close associates for allegedly carrying and attempting to export prohibited items i.e. foreign currency. "The SEMPL had illegally exported foreign currency equivalent to Rs 54 crore approx to various countries during the period 2014-2015 to 2018-2019 which was ultimately used for personal expenses of PK Munjal," the agency said in a statement on Wednesday.

Also read: Hero MotoCorp shares dive 5% on report Pawan Munjal under ED lens

The ED said its investigation revealed that SEMPL got issued foreign exchange to the tune of Rs 14 crore in the name of its officials Hemant Dahiya, Mudit Aggarwal, Amit Makker, Gautam Kumar, Vikram Bajaj, and Ketan Kakkar over and above the annual permissible limit of $2,50,000 in various financial years.

Further, SEMPL also drew foreign exchange/travel forex cards in huge amounts in the name of other employees, who didn't even travel abroad, the agency said.

The agency said the probe revealed that one of Munjal's key associates managed to illegally export Rs 40 crore worth of foreign currency for meeting the expenses of the billionaire businessman during his personal or business foreign trips. During the search operations, the ED said it recovered and seized foreign currency, cash, gold, and diamond jewellery (including foreign-origin gold) worth Rs 25 crore.

The ED raided the residential and business premises of Munjal, the promoter of India's largest two-wheeler automobiles manufacturer, in Delhi and neighbouring Gurugram on Tuesday. 

In a statement, the company said, "Officials from the Enforcement Directorate (ED) today visited two of our offices in Delhi and Gurugram and the residence of our Executive Chairman Dr Pawan Munjal. We continue to extend all cooperation to the agency."

In the last two trading sessions, Hero MotoCorp shares tumbled 7 per cent. 

The ED case is based on a complaint filed against Munjal by the DRI, an investigative arm of the Central Board of Indirect Taxes and Customs (CBIC). According to PTI, the central probe agency is understood to have also taken into account a Customs department case against Munjal and an executive belonging to a "third party service provider" company that was hired by Hero MotoCorp to accompany and look after the travel and logistics arrangements for the billionaire during a business trip to London in August 2018.

The Customs authorities are stated to have apprehended the executive on information from the Central Industrial Security Force (CISF). The CISF had seized foreign currency worth more than Rs 81 lakh in his hand baggage during security checks just before the executive was supposed to take a British Airways flight to London along with Munjal from the Delhi international airport on August 20, 2018.

The Customs seized this currency under the foreign exchange management law and the litigation in this case is stated to be continuing. The Income Tax Department in March last year had raided the premises of Munjal and Hero MotorCorp as part of a tax evasion investigation.

The Central Board of Direct Taxes, the administrative authority for the I-T department, had said during these searches, the taxman found alleged illegal business expenses of over Rs 800 crore and records showing that Rs 60 crore worth of "unaccounted" cash used to purchase land in Delhi and role of some shell companies.

(With inputs from PTI)